With the extent of COVID-19 damage to the economy still to be determined, a comprehensive rescue package that will save jobs and revive main street is urgently needed.

We, small business owners, their employees and their customers, Certified Development Financial Institutions (CDFI’s), credit unions, and community bankers are on the front lines, witnessing the suffering that's been wrought on our families, neighborhoods and communities by this crisis. The roll out of the CARES Act has, so far, brought us no relief. 

As Congress looks at another round of funding to shore up the PPP, we call on you, our elected representative, to enact on our behalf these essential proposals to help alleviate the economic hardships we face and rebuild our local economies:

• Increase the size and scope of PPP loans. The loan factor of 2.5 will not be enough to ensure our small businesses have the working capital needed to rebound. Increasing the loan size to cover 6 to 12 months would allow businesses to address business resumption needs such as reviving markets for their goods and services. Most small businesses rely on independent contractors to manage unpredictability of employee needs. Independent contractor costs should be included in the PPP loan.
• Expand the period of loan forgiveness. Uncertainty of when social distancing measures will end and unpredictability of labor supply and demand as business activity resumes means that more than 8 weeks of loan forgiveness period is needed. 
• Extend the amortization timeline of the loans from two years to 10 or 15 years. For any business whose loan is not fully forgiven, the current two-year payback requirement might be challenging to meet and can lead to defaults. It’s imperative we don’t knock down small business owners with a heavy loan payment before their businesses have recovered and stabilized to the point where they have ability to start paying.
• Prioritize the underserved. Women, veterans and/or minority owned businesses, and those operating in inner cities and rural communities are often underserved. The spirit of the CARES Act should be implemented by processing applications and disbursing loans to these constituencies first.  
• Set aside a fund dedicated to microenterprises that have barriers to accessing the PPP. Microenterprises with often no existing banking relationships are vital to local economies. Funding should be extended to these businesses that are often located in economically depressed areas to preserve and revive communities that depend on them.
• Limit eligibility to small businesses who are suffering. Funding relief should be focused on helping small businesses that are severely impacted by the crisis.  Big businesses with employees in multiple locations, even if said number of employees in each location is less than 500, should not be eligible. Businesses  that are seeing increased revenues should not be eligible.
• Change the economics to fit the timeline. For banks to fund and carry a 10-15 year loan, the rates need to be higher than 1% (it was 4% in CARES). Matching a longer loan term with an appropriate interest rate will ensure banks have the means to fund the loan. It will also minimize the moral hazard of corporations exploiting the program to maximize borrowings. 
• Increase funding to Community Development Financial Institutions (CDFIs) by $1 billion or more. CDFIs specialize in serving low-income, underserved and otherwise disadvantaged communities. They fill gaps that conventional banks do not serve and can quickly deliver money to the hardest-hit areas. CDFIs serve main street not Wall Street. They need to be strengthened and supported so they can deliver financial services to those who need it most.
• Plan for a longer time horizon with comprehensive tools to recover. Even after it’s deemed safe to socialize again, the impacts of this crisis will be enduring. With a government-enforced order to pause the economy, there needs to be a government-backed plan of support until it can be safely turned back on. We need to avert a tsunami of consumer and real estate defaults which will weaken financial markets and the banking system:
  • Create a government-backed relief system for consumers who will be struggling to get back on their feet to avoid credit cards, mortgage, and auto loan defaults
  • Standardize borrower relief measures across federal and state programs
  • Place restrictions on consumer and commercial evictions and foreclosures

This is a time that defines who we are by what we do. This Easter, 6,000 families lined up in cars at a Texas food bank, a scenario that was repeated in many parts of our country. The enormity of the suffering we are seeing is just beginning. You, our elected representative, have the means to help. We are calling on you to do so.

Let us face this crisis with resolute measures that will benefit all Americans, support our small businesses, and strengthen our communities. Let us come out of this crisis with an America that is resilient, with a vibrant economy, ready for growth and teeming with possibilities. 

We look forward to your championship of these proposals.